If you are a vat registered trader in Britain you would then have to pay vat on most goods and services but are you aware that claiming vat back can improve your business cash flow? If you have already paid vat once on any services or goods necessary for your company or paid vat on it in another eu country then you can definitely submit an application for a vat refund.
Most eu countries now utilize the system of vat or value added tax on movement of products and services as a means of collecting more revenue and plugging tax leaks. Great Britain too has moved to vat and when you operate a business in Britain then you will have to apply for vatcontrol.com vat registration when your last 12 month sales turnover touches ?70,000. As a vat registered trader you will need to pay and collect vat on all purchases and sales in connection with your business depending on the classification of these products or services according to the HM Revenue and Customs or hmrc vat department.
However, in order to avoid double taxation on such services and goods, the hmrc department has produced vat rules that will permit you to definitely claim vat back on any services or goods purchased for your business. This amount can be recovered even if you have paid that vat in another eu country that follows vat, provided you are able to show documentary proof which includes the vat invoice or vat receipt. In case you have imported goods to the UK after paying vat in the nation of origin or have attended a trade fair in a foreign eu country where vat is charged for you then it may be claimed back after you fill the necessary vat reclaim form.
You need to hire an excellent vat agent with complete knowledge of uk vat and eu vat rules so that your vat refund claim is passed in the shortest time possible. You will have a time limit of 9 months following the end of the calendar year once you had first paid your vat on those goods or services. You may use several online vat services offered by hmrc vat including filing online claims for vat refunds. You will have to register on the hmrc website before you fill up the required online vat form for vat reclaim. The form will then be sent to the member eu country in which you might have paid vat initially, together with scans of vat invoices which you may have to attach to your application.
Once you receive a confirmation usually within 15 days of receipt of the refund claim, it will require around 4 months for your claim to be approved from that member country before you can get your vat back. In case any additional clarification or documents are needed then you definitely should expect a delay of 4 more months and hence it is essential to have it right the very first time itself. Your vat refund may be deposited in any bank account which you specify within or outside the UK. However, this amount will be in the currency of the nation of origin and will have to be converted into sterling pounds prior to it being transferred into your UK bank account.
Even though the process to reclaim vat back is a bit tedious, a competent vat agent can apply for vat refunds on your behalf and notify you about the status of the applications. The reality is that claiming vat back can certainly enhance your business income by pumping back that double-taxed amount back into your company.